Big-name promoters and venues hosting big-name stars would not go without cancellation insurance, so why should event planners for lesser known fairs, festivals, sporting venues, public parks and other facilities risk being left holding the bag when a performer is a no-show or bad weather washes out their plans?
From state fairgrounds to local municipalities, many organizations are capturing additional revenue streams by scheduling concerts and other events to make the most of their venues, and event planners are tapping into this lucrative market.
But the strategy can backfire when a scheduled performer cannot appear for any number of reasons, such as illness or injury, a family crisis or a missed flight. Many of today's in-demand acts--at both national and regional venues--are older performers catering to aging baby boomers, which makes the chances of health challenges detouring a tour even greater.
When a scheduled artist fails to appear, special event organizers can suffer significant losses, forfeiting income from tickets, concessions and parking fees. They may have difficulty fulfilling already contracted expenses, such as money laid out to reserve a facility or to hire security and concessionaires. And bad weather can quickly throw a damper on outdoor activities.
WHEN THE BIG SHOW IS A NO-SHOW While lining up insurance for a performer's "non-appearance" has long been standard for those with the budget to bring in big names such as Bon Jovi, Taylor Swift or Jerry Seinfeld, those who host lesser known acts at smaller venues have found their options--and eligibility--extremely limited. That's why non-appearance coverage is important.
Non-appearance coverage gives special event organizers peace of mind as they plan an event--and put out tens of thousands of dollars, banking on a solid return.
Coverage can be structured to fit individual needs and budgets. Beyond non-appearance, it can encompass other contingencies outside of the business's control (e.g., event cancelations caused by severe weather, or a local water main break flooding the intended venue).
Event coverage is also important to think about. It can protect the event organizer’s financial liabilities and provide practical assistance should an event have to be cancelled or abandoned due to circumstances outside the organizer’s control.
Event coverage encompasses a wide range of events such as:
• Dinners, dances, proms, balls and banquets
• Holiday parties, product launches and arts festivals
• Music concerts, gigs and festivals
• Country fairs, flower exhibits, carnivals and cultural events
• Film festivals and literary events
• Marathons, road races, horse and dog races, baseball games and golf outings
In addition to some of the more obvious reasons for cancellation such as rain, hurricanes, windstorms, earthquakes or snow, events are exposed to many different risks that could prevent the event taking place, for example:
• A failure of services at the venue, e.g., a power outage or broken plumbing
• Flooding or fire at the venue or in the immediate vicinity
• Emergency building repairs to the venue
• Inability to access a venue due to blocked access routes
Make sure the insurance covers:
• The net loss arising from the cancellation, disruption or rescheduling of the event resulting from circumstances beyond your control
• Any additional costs or charges paid to avoid or reduce a loss
With the appropriate coverage, event planners can recoup expenses incurred to cancel as well as reschedule and reproduce their event, such as costs to reprint tickets, rebook staff and/or secure an alternative venue. Additionally, many events qualify for coverage that can pay the anticipated net profit or revenues from the event. A policy can be customized to target a single event, or encompass an entire series, such as a summer concert program.
While major event cancellations make headlines, smaller performances are also derailed by artist no-shows every day. Now, even if the show is called off, organizers can stay on budget.
Christian Phillips is a contingency underwriter with Philadelphia-based Beazley Group, an insurance company focused on writing a range of specialist insurance products in the U.S. Beazley is a market leader in lines of business including contingency insurance for the sports, leisure, entertainment, conference, exhibition and trade show industries.